The Effect of OIG Exclusion On Health Care Professionals: The Effects of Exclusion: Payment Prohibition & Civil Monetary Penalties Part 2 of 2

Wednesday, July 6, 2016

By Michelle Bedoya, J.D., and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

This is part two of two in a blog series in which the effects and scope of OIGexclusion on health care professionals will be discussed. Click here to read part one of this blog series.

Pursuant to Sections 1128 and 1156 of the Social Security Act, the U.S. Department of Health and Human Services Office of Inspector General ("OIG") has the authority to exclude individuals and entities from federally funded health care programs, such as Medicare and Medicaid. The paramount effect of exclusion is that payment is prohibited for items or services that an excluded individual or entity provides. This prohibition extends to anyone who chooses to employ or contract with an excluded individual or entity. Providers who violate this prohibition are required to pay back all federal health care program funds inappropriately received and may also be subject to civil monetary penalties (“CMPs”).

1. Payment Prohibition.The principal effect of exclusion is that federal health care program payment is prohibited for items or services that an excluded individual or entity provides, orders or prescribes. Payment prohibition also applies to those who employ or contract with an excluded individual or entity. Furthermore, payment of an excluded individual's salary, fringe benefits or expenses, directly linked to federal health care program funds, is expressly prohibited.

2. Civil Monetary Penalties. CMPs apply to any individual who provides, orders, or prescribes items or services while excluded. CMPs may also be enforced against health care providers that employ or contract with excluded individuals or entities. The CMPs can be up to $10,000 for each item or service furnished by the excluded individual or entity, plus three times the amount claimed for that item or service. Additionally, penalties may also include exclusion of the billing provider. A provider may still be exposed to CMP liability, even if the provider contracts with an excluded individual through a third party staffing agency.

Exceptions to Payment Prohibition and CMP Liability.

The OIG has clarified situations, in which a health care provider who receives federal health care program funds, may employ or contract with an excluded individual. An entity receiving federal health care funds may employ or contract with an excluded individual where the provider is able to:

1. pay the excluded individual or entity exclusively with private funds;2. pay the excluded individual or entity from other non-federal payment sources; or3. where the services provided by the excluded individual or entity, relate only to non-federal health care program patients.

Conclusion.

The OIG maintains a list of excluded individuals and entities called the List of Excluded Individuals and Entities ("LEIE"). Health care providers receiving funds from federal health care programs must determine if current or future employees are excluded by searching the list to ensure liability is averted. Providers and individuals alike have mistakenly assumed that exclusion does not apply to an individual or entity that provides services that extend beyond direct patient care. Without a doubt, it is critical for entities and individuals to run a check on the LEIE to prevent any potential consequences. The LEIE can be accessed by clicking here.

About the Authors: Michelle Bedoya, J.D., is an attorney with The Health Law Firm and a long-time consultant to home health agencies. George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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